Employee layoff is the termination of the contract of an employee and may occur due to various reasons. Some of these reasons include discontinuation of a particular job, the expiry of an employment contract, underperforming staff, staff who are behaving badly and overstaffing among other reasons. The decision to layoff an employee is painful to both parties hence the need for managers to perform the dismissal meeting in a way that is not harmful to the employees dignity (DelCampo, 2011). The formal affirmation of the termination of an employees contract is a rather daunting and challenging task for the manager. The manager is required to conduct the dismissal meeting fairly to control negative emotion as well as determine the appropriate compensation to provide to the separated employee. Healthy and effective communication throughout the dismissal meeting makes the process easier and more efficient for both the manager and the employee to be dismissed.
Ways to Cope up With Negative Emotions from an Employee Layoff
The dismissal of an employee creates usually creates a lot of negative emotions. While some employees may quickly process these emotions, others get overwhelmed with the feelings of sadness and guilt (Datta, Guthrie, Basuil, & Pandey, 2010). Therefore, a manager should find efficient ways to cope up with the different negative emotions that accompany an employee layoff. The three most efficient ways that a manager can use during the dismissal process is effective communication, show compassion and remember remaining employees.
Clear communication of the reasons for dismissal is an effective way to eliminate some of the negative emotions that may come up because of an employee layoff. Some of the things to do during the communication process speaking to the affected employee in a private setting, recognizing the contribution of the employee to the organization, briefly explaining the reasons for the employment termination and listening to what the employee has to say and waiting for a response (DelCampo, 2011). Also, the manager can describe the assistance that is available from the human resource department, offer an empathetic ear, and be readily available to address the concerns and issues of the employee about the layoff. On the other hand, there are certain things that the manager is not supposed to do during the employee layoff. These include using humor in the process, engaging in small talk, threatening the employee, and identify other that the company may lay off (DelCampo, 2011). When there is effective communication, then the employee will obtain necessary information concerning the dismissal hence understand the situation and remain calm during the process.
Apart from good communication during the dismissal process, the manager should also show compassion to the employee to be laid off. Dismissal of an employee does not only result in a loss of income but also the loss of self-confidence, loss of professional identity, loss of daily routine, and loss of security among other things (Noer, 2009). Therefore, the manager should carry out the dismissal in a compassionate way to minimize the negative emotions of the situation. Some of the ways to carry out the process in a compassionate way include offer assistance such as recommendations, provide a severance package, pay the employee all the accrued wages, and explain that the employee is eligible for unemployment insurance benefits if applicable (Noer, 2009). Treating the employee compassionately will assist in making the situation bearable for both parties.
Finally, the manager should remember remaining employees after a dismissal process. Laying off an employee affect not only the person who is going but also the people who are left behind in the organization thus having the ability to affect productivity. Therefore, managers should not neglect the employees who are left behind but rather carry out ongoing communication with them to remove the anxiety of their job security and rebuild productivity (Noer, 2009). Doing this shows that the employees are an important part of the organization and that they are the ones responsible for assisting the organization to move forward.
Process of Conducting the Dismissal Meeting
Dismissal meetings are usually stressful for both the manager and the soon-to-be-dismissed employee. Nonetheless, the manager can apply varies key steps to make the meeting easier. The first thing to consider is to handle the employee with respect while remaining calm regardless of the reaction of the employee. It is important to refrain from arguing but rather remain respectful and compassionate (DelCampo, 2011). After knowing how to handle the employee, the next step is to consider the time and place where the dismissal meeting will be conducted. It is important to have a face-to-face meeting which is in a private place whenever possible (DelCampo, 2011). In situations where the employee has refused a face-to-face meeting, then the manager can consider other alternatives. Otherwise, the manager should schedule the dismissal meeting and advise the employee as well as provide necessary documentation that will be needed in the process.
During the dismissal meeting, it is important for the manager to be direct and straight to the point. It is important for a witness to be present preferably from the human resource or management. However, the meeting should not be crammed with questions and answers or discussions on how to improve the situation. The manager should disclose the reasons for dismissal and clearly tell the employee that the decision is final (DelCampo, 2011). During this process, it is also important to discuss the termination benefits. The termination benefits may include insurance continuation, severance or vacation pay if applicable.
After delivering the decision to the employee and communicating the reasons for dismissal, the manager should bring the meeting to a swift conclusion. If the employee possesses any property of the company, they should be collected. The manager should then offer the employee with an opportunity to retrieve personal belongings. This is a respectful gesture and will prevent the employee claiming that the manager did not give them their personal belongings. To reduce litigation risk, the manager should ensure that the employee is provided with his/her final check as soon as possible (DelCampo, 2011). Finally, the employee should be allowed to leave the premises after all the above steps have been completed.
Compensation to Provide to the Separated Employee
There are five forms of compensation that organizations can provide to dismissed employees. These include severance pay, last paycheck, workers compensation, unemployment benefits and legal remedies (DelCampo, 2011). The compensation that will be provided to the separated employee will be severance pay. The severance pay is often based on the duration of employment, but there is no law that requires an employer to offer severance pay to a dismissed employee. The number of months the laid off employee will receive the compensation will depend on the duration of employment with the company. For instance, if the employee worked for the company for ten years, then the compensation shall last for ten months after dismissal. Alternatively, a lump sum can be issued to the employee covering the duration of the ten months. Along with the severance pay, the employee will also receive accrued commission during employment as well as reimbursement for vacation time.
Chart for Compensation Disbursement
The chart below outlines the compensation to the employee in the case of dismissal. The amount of compensation that the employee is entitled to depend on the duration of employment in the company and the payment rate at the time of dismissal.
Payment Date Duration of Employment Payment Amount
November 2016 1 year $3,500
December 2016 2 years $3,500
January 2016 3 years $3,500
February 2016 4 years $3,500
March 2016 5 years $3,500
April 2016 6 years $3,500
May 2016 7 years $3,500
June 2016 8 years $3,500
July 2016 9 years $3,500
August 2016 10 years $3,500
Total compensation = $3,500 x 10 years of employment = $35,100
If the company decides to pay in a lump sum, then the employee will receive $35,100 in November 2016.
How the Layoff Will Affect the Company
A layoff does affect not only the dismissed employee but also the entire company. Although the company may view that the reason for dismissal was valid, the employee layoff may greatly affect the company in various ways. These include reduced employee morale, increased direct costs to the company, and decreased customer loyalty in some instance. Managers usually underestimate the way in which employee dismissal may affect the morale of workplace and increase fear of the remaining employees. The remaining employees may be stressed and start asking questions about the integrity of the company especially when they did not know the reason for dismissal (Tajzadeh-Namin, 2012). Evidence of this may be in the form of gossip or rumors and weakened relationships in the workplace. These actions can result in decreased productivity at a time when employees need to work more effectively. Consequently, some of the remaining employees may decide to resign or seek employment in other companies (Tajzadeh-Namin, 2012). The manager can deal with this issue by convening regular staff meetings with remaining employees, encourage information sharing and allow the employees to learn from each other. Also, the manager should encourage employees to ask any questions and give honest answers as well as tell them honestly when the answers to certain questions are unclear (Iverson & Zatzick, 2011). Also, the manager should always be available to all employees and have an open policy that will allow them to find it easy to share their concerns when necessary.
Apart from reduced morale in the workplace, employee dismissal can also result in increased direct costs to the company. Though companies may view that the layoff may serve them money, they may end up incurring additional costs because of the employment dismissal (Datta et al., 2010). Such costs may come in terms of severance pay, legal remedies, unemployment benefits, and other compensations that may be necessary for the dismissed employee. The remaining employees may also need overtime wages because of doing additional work that was supposed to be done by the dismissed employee.
Finally, the company may experience decreased customer loyalty in some instance. Employee dismissal may have a significant effect on the ability of a company to retain customers. When a company dismisses its employees, it may send a message to certain customers that it is undergoing some crisis (Iverson & Zatzick, 2011). As a result, some companies may experience inconveniences such as delays in delivery certain goods and services hence further alienating customers.
Datta, D. K., Guthrie, J. P., Basuil, D., & Pandey, A. (2010). Causes and effects of employee downsizing: A review and synthesis. Journal of Management, 36(1), 281-348.
DelCampo, R. G. (2011). Human resource management demystified. McGraw-Hill.
Iverson, R. D., & Zatzick, C. D. (2011). The effects of downsizing on labor productivity: The value of showing consideration for employees' morale and welfare in highperformance work systems. Human Resource Management, 50(1), 29-44.
Noer, D. M. (2009). Healing the Wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations. John Wiley and Sons.
Tajzadeh-Namin, A. (2012). An empirical study on measuring the effect of layoff on job satisfaction and employee commitment: A case study of detergent producer unit. Management Science Letters, 2(1), 213-220.
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